If you are looking to buy a commercial property for the first time, then it is crucial to educate yourself on how to maximise the potential you get for your investment. All too many businesses fail because they make the wrong decisions early in their life, and making a poor property decision can see you saddled with a money pit and one that you can’t sell.
Here are the best tips we can provide when buying commercial property. Don’t make a poor decision, or your decision will make you poor.
1) Don't RUSH!. It is definitely exciting to make the first steps towards making your business dreams come true. However, would you sooner have them come true briefly, vaguely and quickly, or gradually, firmly and permanently? If it is the first, then fine, buy the first place you see. If the second, then keep reading.
2) Admit that you do not really know what you are doing. Because you don’t, not to the extent that an expert would. TV and the bookshops are filled with the advice of people who’ve made millions from property decisions, who know the market, recognise the drawbacks and have the advantage of years of experience. Seek advice from experts in the field.
3) Creating a plan is important, sticking with the plan is even more important. There’s a limit to what you can make from your business, and the plans can go wrong. At the beginning, make sure you’re on track with the figures and do not let idealism interfere. The figures involved are not just numbers on a screen – they’re your future, so don’t play around with them.
4) Do some leg work. Check out the area in which you’re looking to invest – what is nearby, what are other people paying for property in the locality? Speak to traders in the region. Ask them if they could choose to move, would they? How much did they pay for their spot?
5) Three simple words. Supply. And. Demand. You might have big ideas for your business, but if someone else in the area who has the same plans a few years back then they’ve got a massive advantage. Is there a need for what you’re going to provide? If so, then the location is perfect. If not, keep looking for other areas.
6) Don’t be gun-shy. Yes, it’s crucial to do research of the area, and the paperwork, and all the other work as well. But remember, while you’re sorting out the finer details, remember that a project requires final action. Don’t miss out on a great deal because there’s some pettifogging detail you haven’t got finalised. A bit of multi-tasking will enable you to get it done.
7) Make people remember who you are. People will remember the guy who came up and spoke to them, who shook their hand and showed an interest. So if they get wind of a good deal floating around they may put two and two together and get you.
8) Don't be narrow minded. The deal may be close to completion and suddenly a problem shows up – something the vendor had kept hidden. The temptation to just shrug and sign may be going at you, but ask yourself why he kept quiet before doing anything rash.
9) Look for a motivated seller. It may cause you some moral problems, but sometimes people are selling up and moving out due to circumstances beyond their control. This drives down the price of the property. Don’t feel bad about being a shark, realise that there are several people out there who’ll screw the guy even worse. You can be sympathetic and still get the deal done. In fact, showing understanding can put you at the head of the queue
10) Good luck! Let’s face it, luck always plays a part in business success – when you get a break just make sure to maximise it!
This article is brought to you by Tim Green Commercial - Find tips and tricks to buy Commercial Real Estate
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